by Brendon Degner | Jun 16, 2022 | Education, Merchant Services
Before you decide to go with one merchant services provider or another, it is important to have an honest and thorough discussion. The right fit is crucial in helping your business save time, money, and stress in the long run. Asking the right questions is a great place to start, and a good merchant services provider should have no reservations addressing any of these concerns.
1. What Do You Do?
As a business owner, you’ve probably been told that you need merchant services. But that doesn’t tell you much about what, exactly, a merchant services provider does. Ask your potential provider for specifics about what services they offer and how it will benefit your business.
In a nutshell, a merchant account enables a business to accept payments by credit or debit card. Card data is handled by a payment processor and transferred securely to the business bank account, where it is received as funds. Beyond this, your merchant services provider should be willing and able to answer all your questions about the specifics of payment processing, including security, data storage, fees, and more.
2. What Security Steps Do You Take?
Security is of the utmost importance when processing credit card data, which can be subject to all manner of fraud. Ask your merchant services candidate to explain any and all security measures they take to prevent data breaches.
Your merchant services provider should also be willing to help you work toward PCI compliance. This is a set of twelve security requirements developed by the Payment Card Industry Security Standards Council. PCI certification can take time, but it will help you avoid additional fees for non-compliance.
3. What is My Contract, Exactly?
There is no reason why your merchant services provider should want to hide anything from you within your contract. He or she should disclose all fees and thoroughly review the contract terms with you. Watch out for shady clauses like low introductory rates that will double or triple after a trial period. Ask about locking in your rate and if you are eligible for any discounts.
A good merchant services provider should want to help your business succeed so you can have a long-term relationship. Hidden fees, unreasonable contract lengths, and too-good-to-be-true intro offers are red flags that you will want to watch out for.
4. What Happens if I Have a Problem?
The best merchant services providers will be communicative. If you have an issue, your provider should have a way for you to discuss it with a live person and in a reasonable amount of time. Generic customer service lines or chat bots that have you on hold for thirty minutes at a time are no good in an emergency. Ask your provider to be candid about their customer service protocols.
You can get a good idea of how well your potential provider handles customer service through their online reviews. Check for key words like “responsive” and “above and beyond.” This is a solid indication of their attitude towards helping established clients.
5. How Long Will it Take to Get Set Up?
The time it takes for your merchant account to be approved will ultimately depend on your type of business and your financial standing, including credit score and any prior issues with merchant services. That being said, the process generally takes anywhere from a few days to a few weeks. If it is taking any longer than that, you may want to try a different provider with more experience in your type of business.
If your business is considered high risk, for example, you will want to be sure you are working with a merchant services provider who has experience in getting approval for these types of businesses. Otherwise, you run the risk of your merchant account being denied and having to restart the process.
Help Choosing a Merchant Services Provider
Selecting the right provider is essential in helping your business grow. With so many companies to choose from, this can be a daunting and time-consuming task. A merchant services broker is a great place to start to help you filter out the best candidates for your business. Brokers have relationships with many different providers and can help find the best match for your needs.
If you are a business in need of merchant services, contact Brendon Degner at Summit Payments. Brendon is highly knowledgeable about industry requirements, trends, and common security issues. Call our office today to get started.
by Brendon Degner | Apr 19, 2022 | Education, Merchant Services
What is a Card Not Present Transaction?
As the name suggests, a Card Not Present (CNP) transaction occurs any time a payment is processed without a physical credit card. Instead, the credit card information is entered by hand either by the consumer or the merchant. CNP transactions are most common for online orders or other remote transactions, such as via fax or phone.
By contrast, Card Present (CP) transactions indicate a direct interaction with a customer and credit card. CP processing involves actually swiping or dipping the credit card in a reader at the point of sale.
What Are Some Examples of CNP Transactions?
CNP transactions are not new, but they gained significant traction in the wake of COVID-19. The ability to accept payments remotely became essential for businesses to stay open during lockdown, and consumers have since developed a general preference for shopping online.
These days, nearly every kind of business accepts remote credit card payments. But some of the more common forms of CNP transactions involve:
- E-commerce, which includes all online purchases of goods and services
- Auto-payments or recurrent online transactions, such as subscriptions
- Take out and delivery food services (this includes phone orders as well as mobile apps)
Fees and CNP Transactions
Just as you are charged certain fees for physical CP transactions, you are also responsible for fees each time you complete a CNP exchange. One of these is known as the interchange fee. This is the percentage a card-issuing bank charges a merchant each time the card is swiped or entered remotely.
Interchange fees cover handling costs and mitigate risks associated with approving payments, such as fraud or chargebacks. Credit card fraud accounts for tens of billions of dollars in losses annually, and the majority of these losses are shouldered by the issuers.
Without the need for a physical card and other validating factors, such as a PIN, signature, or ID card, CNP transactions are associated with a much higher risk of fraud. Because of the increased risk in approving these kinds of payments, the interchange fees for CNP transactions are usually higher than when the card is present.
Tips for Lowering CNP Fees
The interchange fees assessed for your CNP transactions will vary, but there are certain steps you can take to help reduce overall costs:
- Use a merchant services company that includes built-in fraud tools, such as zip code and IP address verification.
- Require full customer addresses for remote transactions.
- Fill in as many fields as possible.
- Keep all information organized and protected.
Get Help Processing Credit Card Payments
If you are interested in accepting credit card payments, both in person and remotely, a merchant services broker is a great place to start. Summit Payments matches businesses with the perfect merchant services provider while continually looking for ways to reduce fees and increase security. Contact our office today to see how we can help.
by Brendon Degner | Apr 13, 2022 | Education, small business
Knowing how to prevent cyber attacks is a crucial step for long-term success in your business. Small businesses are particularly vulnerable, as cyber criminals may perceive them as having fewer security resources.
As attacks become more and more sophisticated, many business owners find themselves overwhelmed with how to avoid becoming a target. Luckily, there are a few simple measures that remain highly effective and should form the basis of your cybersecurity resources. Regularly implementing these steps will help avoid potentially damaging cyber intrusion.
Top 6 cybersecurity tips
1. Use Strong Passwords
This may seem obvious, but utilizing strong passwords to access data is one of the most important steps in good cybersecurity. As a business owner, you have a lot of information you need to keep track of; it may be tempting to use the same two passwords for everything, but this poses a significant risk.
Use different passwords for each and every point of entry. This does not mean simply adding an exclamation point or a dollar sign to another password. In the event that a cyber criminal is able to discern one password, don’t make it easy on them by using the same or similar passwords for everything else.
2. Use Multi-Factor Identification
Whenever possible, use at least a two-factor identification process. This process effectively involves more than one way to prove you deserve access to certain data. In addition to the initial password, for example, you could require that someone enter a code sent to an authorized email address. Some businesses might even implement biometric authentication tools, such as fingerprint scans or facial recognition.
3. Use a Firewall
The concept of a firewall is not new to cybersecurity, and for good reason. It is a highly effective way to block undesired data from infiltrating your network. A firewall allows you to create a set of security requirements that must be met before any outside data is permitted. Information coming from suspicious or unsecure websites, for example, will be blocked and flagged.
A firewall can exist as software or hardware, though it is generally recommended you use both. A software firewall is installed directly on your device and monitors traffic through port numbers and applications. A hardware firewall is a physical piece of machinery that forms a barrier between your network and your gateway address.
4. Update Your Software
Again, it may be tempting to postpone software updates. But these updates often address new security concerns, and skipping them can leave you vulnerable. Make sure you and your employees are routinely updating software, even when it is unprompted. This will protect you from new viruses that can affect both the operating system and third party software.
5. Make Back-Ups
A particularly nasty form of cyber terrorism involves something called “ransomware.” As the name suggests, this type of virus locks you out of your files and data and holds them hostage until you pay a ransom to retrieve them. Even if you pay the ransom, you cannot be sure your data will be returned or that the attacker won’t come back.
The best way to avoid being a victim of ransomware is to make back ups. Back ups are copies of your data that are stored on the hard drive or an external storage device, such as a flash drive. Make regular backups of anything and everything you need to operate your business. In the event you are targeted by ransomware, your attacker will have nothing to bargain with.
6. Train Your Staff
All the firewalls, backups, and passwords in the world won’t make any difference if your employees are not properly trained to recognize cyber threats. Hold regular training sessions that focus on the latest scams and how to avoid them.
Employees should be advised to never open emails from unknown addresses and verify all sources before downloading anything. If possible, it is a good idea to hire an outside agent to provide professional instruction on cybersecurity.
Stay On Top of Cyber Security Threats
Credit card and bank data are primary targets for scammers. Your first point of contact for preventing a data breach should be your merchant services provider. He or she will be well-versed in the most effective cybersecurity measures as well as the latest trends for illegally obtaining data.
If you need assistance in finding a quality merchant services provider, contact Summit Payments. We will help you find the provider that best meets your specific budget, business, and security needs.
by Brendon Degner | Apr 6, 2022 | Education, small business
Merchant Services vs. Credit Card Processing
While the terms “merchant services” and “credit card processing” are often considered synonyms, they are not actually the same thing. Both concern the processing of payments for your business, but the capabilities and support available for each is quite different.
What Is a Credit Card Processor?
A credit card processor is also called a payment processor. The primary role of a payment processor is to route data from a credit or debit card to a merchant’s bank account.
A payment processor is often paired with a point of sale (POS) system to facilitate payments. The POS is the physical or digital place where a transaction occurs (e.g. where the credit card is swiped), and the processor is a component of the POS system that routes the information from the card.
In some cases, the payment processing company will provide POS equipment, customer support, and assist with things like PCI compliance. Generally speaking, however, credit card processors are limited to simply moving data from one place to another.
What is Merchant Services?
Merchant services takes the credit card processing system a step further by adding a human element that focuses on helping you cut costs, remain compliant, and stay secure. A good merchant services company offers several direct benefits to your business:
1. Merchant Services Is Your Personal Payment Expert
A good merchant services provider will be well-versed in anything related to a business accepting payments. From the best POS systems to security compliance, you will have someone you can contact to help you navigate the complexities of electronic payments.
Having someone you know you can count on to handle the entire payment process not only alleviates stress, it frees up valuable time. You can focus on actually running your business and let merchant services worry about the headache of accepting payments.
2. Merchant Services Know the System
As a business owner, you are probably always looking for ways to cut overhead costs. Merchant services can help you save money by negotiating better rates and minimizing fees. Your provider will also be aware of common “hidden charges” associated with payment processing and try to eliminate or reduce these charges. This rate and fee reduction can result in significant savings for your business.
3. Merchant Services Keep You Secure
One of the most important aspects of payment processing is keeping client information secure. You must obtain a certification stating you are compliant in this respect. If you do not have a certification or your certification lapses, you are subject to fines ranging from $5000 to $500,000.
This may sound scary, but a merchant services provider can demystify the certification process and ensure you adhere to regulations. They will know what you need to do to maintain compliance based on the types of transactions you accept each month.
Additionally and very importantly, a merchant services provider will be informed of the latest trends in cybercrime. This is an ever-growing threat and there are literally hundreds of ways data can be stolen. Your provider will teach you what to watch out for to avoid a security breach.
Finding a Good Merchant Services Provider
Finding the right merchant services provider can seem daunting. There are many, many companies to choose from, all with varying costs and capabilities. The best place to start when selecting a provider is by going to a qualified broker. He or she can suggest the merchant services provider that suits your individual needs.
If you are in need of merchant services but aren’t sure where to start, give Summit Payments a call. We have years of experience in the payment processing industry and love finding ways to save you money. Contact us to schedule a consultation today.
by Brendon Degner | Apr 1, 2022 | Education, small business
Steps to Cut Overhead as a Small Business
Running a business can be expensive: from rent to business cards to mileage, costs quickly add up. It can be useful for small businesses, in particular, to know where you can effectively reduce overhead costs without compromising efficiency or quality.
Overhead vs Operating Costs
There are two main kinds of spending associated with running a business: operating costs and overhead costs. Understanding the difference between them is a great place to start when you are looking to reduce business expenditures.
What Are Operating Costs?
Operating costs are ongoing expenses related to the actual manufacture and sale of your product on a day-to-day basis.
Common operating costs might include:
- Packaging
- Special Equipment
- Payroll
- Ingredients/inventory
Operating costs are generally considered essential to the business. While you can look for ways to reduce the cost of operation, you run certain risks. For example, you could reduce payroll expenses by eliminating certain employee positions. But this cut back in personnel could ultimately impact efficiency and productivity.
You could also attempt to save costs by switching to a different vendor for certain ingredients. However, you may lose established customers who like your product exactly the way it is.
What Are Overhead Costs?
Overhead costs are those related to the actual running of the business outside of labor, materials, and production.
Many overhead costs are considered “fixed” expenses, since they will continue regardless of whether or not the business is turning a profit. Certain expenses, such as utilities, will vary depending on the scale of the business.
Common overhead costs might include:
- Rent
- Utilities (electricity, internet, water, gas, etc.)
- Transportation
- Marketing
- Merchant services
- Insurance
- Administrative salaries (accounting, management staff, etc.)
Unlike operational costs which are more difficult to minimize, overhead costs should be reviewed regularly to see where cutbacks might be made. Switching to a better contractor with lower rates is almost guaranteed to have a positive effect on your profits.
How To Determine Overhead Percentage
Calculating your overhead percentage will help you decide if and when you need to find ways to reduce costs. While the exact percentage of revenue you are spending on overhead costs will vary depending on your personal business, most experts recommend you do not exceed 35%. To determine your overhead percentage, divide your monthly overhead costs by your monthly sales. Then, multiply by 100 to obtain the percentage.
(Monthly Overhead/Monthly Sales) x 100 = Overhead Percentage
In general, the lower your overhead percentage, the better. If it seems ridiculously low, however, you may be compromising too much. If you find your percentage is too high and digging into your profits, consider the following easy ways to reduce your overhead:
1. Downsize/Eliminate Office Space
One of the biggest overhead costs associated with running a business is rent. These days, many of us are still working entirely from home or utilizing a hybrid model. Ask yourself:
Do I even need an office?
Remote work has been shown to be just as effective as in-office work, if not more so. During COVID lockdowns, employees reported greater morale and productivity levels. This may or may not be related to the ability to work in comfortable clothing and avoid being in traffic for three hours every day.
If I do need an office, does it need to be this big and/or fancy?
How much space do you really need for the office to be efficient? Do you need an office with a private bathroom or a ritzy view of the city? Do enough people visit to warrant a waiting area?
Does my office have to be in this part of town
In Denver, rent can vary wildly depending on the district. Consider moving your office to an area where rents are not as high.
2. Hire an Accountant
While it may seem counterintuitive to hire another employee when you are looking to cut costs, an accountant is a worthwhile investment. A good CPA will help you avoid mistakes and will be knowledgeable about tax breaks and deductions that could save you thousands of dollars.
3. Review Merchant Services
These days, nearly every business requires a way to accept credit card payments. The ability to process credit and debit transactions is known as “merchant services.” Electronic payments are facilitated via a merchant account, which is essentially a bank account that allows businesses to accept credit and debit payments.
However, not all merchant services companies are created equal. Rates can vary significantly from merchant to merchant (by more than 2 percentage points!). Furthermore, many companies charge questionable fees that go unnoticed by clients. These fees can add up to thousands of dollars over time!
Like an accountant, hiring a good merchant services broker is a wise investment. He or she can help you find a company with fair rates and eliminate unnecessary fees.
4. Outsource
Outsourcing can be a great way to scale back on costs by filling employee gaps without committing to full-time pay. It is particularly useful when you only need freelance work, such as digital marketing or graphic design. In the event you no longer need their services, you can simply pause or cancel your contract.
5. Save Energy
Implementing energy-saving appliances, light bulbs, outlets, and windows can be another great investment that will cut costs for utilities long-term and give a friendly nod to the environment. You can also encourage customers and employees to go paperless, ultimately saving a lot on ink, paper, postage, and printing/copying equipment.
Locating a Merchant Services Broker
Next time you review overhead costs, be sure to review your merchant services provider. This is a common expense that is often bloated with unnecessary processing fees. Brendon Degner has years of experience helping clients find quality merchant services at fair prices. Contact Summit Payments today to schedule your consultation.
by openmedium | Feb 28, 2022 | Education
Visa and MasterCard have very specific rules when it comes to payment acceptance procedures. When a purchase is made on a credit card it goes through a qualification process based on specific data requirements that are set forth by Visa and MasterCard. These data requirements are divided into three Levels (Level 1, 2, and 3.) and help determine the interchange rate that the transaction qualifies for.
Visa and MasterCard want this additional data because it helps them be more efficient. So, as an incentive they offer a lower, discounted rate to merchants who provide the additional data. Interchange Optimization simply gives your business the best chance at qualifying for the lowest interchange rate every single time.
Click here to learn more about Visa Interchange Reimbursement Fees.
Click here to learn more about MasterCard Interchange rates and fees.
Don’t Miss Out
When you have a business to run, it’s overwhelming and impossible to monitor 400 different interchange categories, your rates, and merchant fees. Interchange Optimization can help you achieve lower rate categories on all of your card transactions.
What’s Trending
B2B ACH and check transactions are falling by the wayside. Today, business owners are charging large purchases on their business and corporate credit cards. This provides them with flexible payment terms and, more importantly, the opportunity to accumulate points or cash back on regular business expenses.
We get it. Managing and submitting all of the required data for a single credit card transaction sounds like a daunting task. Not to mention, time consuming. Summit Payments has partnered with the leading payment gateways that will help you put Interchange Optimization on autopilot. These gateways feature auto-fill technology that completes the data requirements for you. Your business will benefit from more revenue by keeping a greater percentage of every sale.
Automate Interchange Optimization
Submit required data automatically
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Discover your opportunity to reduce costs
It’s easy to identify whether or not your business will benefit from Interchange Optimization. Look at the interchange section on your merchant statement. Pay attention to words like Commercial (COMM), Corporate (CORP), Business (BUS), Purchasing (PURCH), Fleet (FLT), EIRF, and Non-Qualified (Non Qual). If a large percentage of your sales are falling into these categories, then you could benefit from Interchange Optimization.
Connect with us and our team will provide you with a complimentary statement analysis.
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